Friday Rant: Two Years of Economic Uncertainty Culls Wine Snobbery

Working for Spend Matters definitely has its perks. Chief among them is that our fearless leader -- despite his ubiquitous thrift -- is a generous wine snob. But then again, wine snobbery need not be defined by how much one spends on a fine cab, malbec or burgundy. While we can never be sure just how much Jason has paid for a superior red, U.S. consumers are spending fewer dollars per bottle for their grape juice. Jason's also been paying less as well, thanks to the bargains that folks like Sam Chen (Echelon Wines) have been able to surface due to the downturn in the super premium wine market, outside of Bordeaux (which has skyrocketed).

"After switching to less-expensive wines in the downturn, many consumers are staying at those lower prices because they liked what they found, industry executives and analysts say," according to Thursday's WSJ. The Journal also claims that "The economic downturn was toughest for the U.S. wineries that sell wines for $20 a bottle and up ... [and] Mid-priced bottles are the life of the party. Last year, unit sales of wines priced at $9 to $12 a bottle rose 12% in food, drug, convenience and other stores, a faster growth rate than in other price segments..." Chris Howell, general manager at Cain Vineyard & Winery in St. Helena, California, is quoted saying "he doesn't expect consumers to pay the kinds of prices they paid before the economic downturn. It's not ever going to be what it was..."

Perhaps Mr. Howell is being a bit pessimistic. Rick Small, owner of Woodward Canyon Winery, in Lowden, Washington -- "which sells most of its wine for about $50 a bottle" -- is also quoted revealing that "revenue at the 30-year-old winery, which employs about a dozen people, rose 10% last year after two straight years of declines." It makes perfect sense that savvy wine drinking consumers have extended their frugality to wine buying over the past two years, but that doesn't mean they won't drift up market once they feel more economically secure. They are likely, however, to continue seeking more bargains.

We suggest (when Jason isn't supplying): make friends with your wine merchant. Most are rather passionate about their inventories and will be more than happy to show you the bargains. And just in case you're thinking that Jason was pouring when we made a few recent attempts at posting humor, everyone was sober and always is -- at least in the office, until happy hour on Fridays.

- William Busch

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